Intraday Market Analysis – Gold Seeks Support
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Gold treads water as markets await a slew of central bank decisions in the coming days.
The recent break above the daily resistance at 1805 is a prerequisite for a bullish turnaround. However, the rally has met stiff selling pressure at the supply zone around 1813 which is at the origin of the September sell-off.
Along with a repeatedly overbought RSI, a combination of profit-taking and fresh selling may weigh on the precious metal in the short term. 1777 is the immediate support and its breach would send the price to 1760.
USDCAD pierces through supports
The Canadian dollar surged after the Bank of Canada ended its QE.
As the RSI from the daily chart showed an oversold situation, the greenback had attracted bargain hunters at its four-month low around 1.2300. However, it has given up all recent gains as it revisits the bottom.
1.2430 is now fresh resistance and the downtrend may resume. 1.2200 would be the next target as those who have been waiting for a catalyst join in. An oversold RSI has caused a temporary rebound which is likely to meet strong selling interest.
USOIL retraces after overextension
WTI crude tumbled after an unexpected surge in US inventories. Medium-term sentiment remains bullish, though an overbought RSI on the daily chart may prompt buyers to proceed with caution.
A fall below 82.50 and then 81.00 has exacerbated profit-takings as late buyers rushed for the exit. 79.50 is the next support.
A bearish breakout would extend the correction to 77.00 which was previously a resistance, making it an area of interest. An oversold RSI may trigger a rebound with 82.30 as a fresh resistance.
